Retirement: Your New Beginning: Leveraging Over 1000 Clients Through Their Retirement for the Past 20 Years
186
Retirement: Your New Beginning: Leveraging Over 1000 Clients Through Their Retirement for the Past 20 Years
186Paperback
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Overview
Product Details
| ISBN-13: | 9781683501268 |
|---|---|
| Publisher: | Morgan James Publishing |
| Publication date: | 04/04/2017 |
| Pages: | 186 |
| Product dimensions: | 5.40(w) x 8.50(h) x 0.60(d) |
About the Author
Read an Excerpt
CHAPTER 1
PART I ADJUSTING TO RETIREMENT
THE RIGHT CHOICE
Is your future brighter than your past? Imagine what it's going to be like not to have to work anymore. Do you envision your retirement as a time that will surpass your working years in fulfillment and meaning?
Have you ever given up something you liked for something you loved? Think of when you were young, and you first experienced the feeling of saving up for something special. Do you think the feeling of finally retiring will resemble this?
Will all the wisdom you've gained over the years of your life be used for your benefit moving forward? Each of us continually learns as we go through our lives, whether we realize it or not. What experiences have you had that will shape you in the years to come?
These questions and many more are what we use to gain insight and understanding into who you really are and what your future will hold, to help you make the right choices for retirement. Maybe you see vacations, travel, relaxing on a beach in Spain, or driving across the country. Maybe you envision volunteering for an organization you love, or enjoying the freedom of consulting in a way you were never able to before. You might see yourself relaxing and spending time with your grandchildren, or helping out family or loved ones.
There are thousands of different ways you can add meaning to your life. But for anyone in any walk of life, the transition that we face in retirement can really shake things up. As your life changes, it takes time to recalibrate, to find your values again. You might also find that retirement is the time when you stretch out and find your potential.
It's exciting to plan for things like this. However, your goals aren't going to achieve themselves. And the intimidating thing is that you are responsible right now for making sure you'll be able to achieve your goals. Every single person retires. But the way people plan for this stage of life is personal and different. For some people, it can feel like there is a canyon between who they are and who they want to be when they retire. As their retirement approaches, they realize they need help.
It is my purpose to provide meaningful steps toward finding a path to retirement. Moreover, I want to make retirement and retirement planning a more meaningful process. No matter where you are in the timeline — whether already retired or in the process of retiring — I want this book to provide you with encouragement and direction. More than anything, I hope you're left with a sense of community. Even if our portfolios are completely different, it's important to find common ground in the challenges that retirees face. We all have choices to make. After reading what I've written here, my hope is that you'll be that much closer to making the right choices for your retirement.
USING THE RIGHT CHOICE QUESTIONS
For your convenience, you'll find all The Right Choice questions collected in the appendix at the back of this book, as well as on our website at miramontescapital.com.
Planning for your retirement is a personal process, and it's my goal to help you position yourself within the information and advice contained within this book. In order to help you engage with the text more, I've included a discussion or journal question at the end of each section. These are designed to help you personalize the information, as well as give you the chance to take steps toward preparing and planning. These questions can stand as discussion starters for you and your partner, and can be a wonderful way to warm you both up towards a difficult subject, as retirement often can be. In addition, you can work through the topics yourself, preferably responding to the prompts by writing in a journal. The nature of retirement and retirement planning makes it interesting and useful to look back on the ways you've changed throughout the process.
RETIREMENT IS THE NEW BEGINNING
As I've continued to progress in my career, resulting in my decision in 2015 to move from the wire house I worked for and become an independent RIA, or Registered Investment Adviser, I've kept my eyes open. The journey has taught me a lot about people, what most of us feel when confronted with the challenge of retirement, and most importantly, some universal needs in the area of financial advice.
I've met with thousands of people from all walks of life over the last twenty years, and I've come to realize that the one thing true for all people, despite how their retirement situations vary, is that retirement is a new beginning — it's the new beginning — for each individual's life. When you retire, you're faced with a possibility for renewal and reinvention that is basically unequaled in any other transition in your life. It's up to you to decide what your goals are and how you're going to achieve them.
Meet People Where They Are
One of the best lessons I ever learned about this business was to meet people where they are. The first group of people I advised at the beginning of my financial career were bus drivers and mechanics. I would literally meet them where they were, stooping down to where a mechanic was doing repairs under a bus to talk about savings habits. More than once I assembled the drivers and mechanics together into the rowed seats of the very machines they operated and worked on to give them an overview of the difference between bonds and stocks.
These folks were workers. They were genuine and down to earth. Many had never thought seriously about the concept of retirement, "In retirement planning, every single person has different needs." and it was obvious that these folks needed information. In my initial meetings with these clients, I began by spewing all the information I could, weighted heavily with every industry-specific term I could muster. I must have sounded very "professional" – but they didn't get a thing from it. I think for my first few clients I only succeeded in scaring the stuffing out of them.
Luckily, the story didn't end there. Time and experience taught me that financial planning is about simplifying. I realize now that I was denying those early clients and myself the honesty of interacting with them on a personal level. The maxim I have now built my business upon is that in retirement planning, every single person has different needs, and requires a plan that reflects those specific needs.
Retirement: It's 50% Psychological, 50% Financial
When you retire, you go through two big transitions. One is financial — preparing yourself to live beyond receiving a paycheck. The other equally important transition is a psychological one. Retirement is a new beginning, and that means closing the book on one chapter in order to begin the next. The psychological transition is learning how to fully process that. If you're going to have a successful retirement, you have to plan for both of these transitions.
A couple of years ago, I helped a couple retire. They both, and especially the wife, were really hesitant. She was worried they wouldn't be able to maintain their lifestyle. But she also feared the different lifestyle that comes with retirement and of having to redefine one's self. We met a number of times over the year to educate them and help pinpoint what was most important to help them construct their most meaningful life. Slowly but surely, as my client's wife came to better understand the process of retiring, a transformation happened. She found that she no longer feared the idea of redefining herself after work. This transformation was possible because we were able to simplify their retirement. They could grasp the plan and take ownership of it, and were therefore freed up to move forward in the retirement process. Based on the needs of their lifestyle, the couple decided that she would retire first at the age of 60. With her husband working for a few years more, she was able to delay her social security until the age of 66. Their situation wasn't an exceptional or tricky one. They simply needed to be met where they were.
As of now, they take regular long trips across the country. We recently received a beautiful picture of them, sent from the road, showing them in their new motor home overlooking a lush, green valley in Tennessee. Theirs is a success story, and it shows just how related the financial and the psychological pieces of planning are. When you're comfortable about your financial decisions, your life decisions come together more easily.
The Right Information Makes A Difference
Another client story shows how just a little information, when applied to a specific situation, can make all the difference. I met with a couple who were really discouraged about their present retirement situation. They had amassed $60,000 in debt and were having difficulty making the $2,600 monthly payments while working. They assumed that if they couldn't pay down the debt while receiving a salary, there was no way it would be eliminated in retirement. They were scared that the debt would fall to their heirs, which they could not abide.
We looked at their options and found that their IRA would support a one-time distribution that would eliminate the debt. I advised them that knocking out the debt this way would save thousands in interest over their retirement, in addition to saving them from the monthly payments their budget couldn't support. Suddenly, retirement seemed possible again.
Eliminating that stress opened doors for the couple that were unimaginable before. After retirement, they took advantage of their new freedom by traveling to places they had always wanted to see. Spending time with their grandchildren, they say, has really added a new dimension of happiness to their life. They both received a scare a few years back when the husband had to undergo a quadruple bypass surgery, and that has made them both perfectly aware of how important it is to enjoy their quality of life while they can.
When you're unfamiliar with investments and retirement accounts — which most people are – such basic information can be the difference between a happy retirement and a stressful one. How much more true is this when it comes to the more esoteric points about retirement, like tax advantages, which can save thousands of dollars? The happiness I can give people, like in the case above, makes me love being a financial architect.
Our Dedication to Education Goes Both Ways
When asked to describe my method for giving retirement advice, I arrived at two main principles: first-class communication, and a dedication to education. It's my goal to educate clients in any areas they lack, whether that be the Social Security system, assisting them with their company's benefits package, or helping them to get the most out of their stock options. Moreover, we promote continuing education any way we can. We customize market updates, we hold client breakfasts to stay in touch, we host quarterly events where we cover market updates as well as other areas that may affect retirement, such as health and nutrition. The more educated you are, the better the decisions we are able to make together.
This is as true for us as it is for our clients. A guiding principle behind the services we offer at Miramontes Capital is allowing our clients to educate us about their life.
My client Dave had a lot of stress on his shoulders. Not only did he provide for his spouse and all of his children, his ailing mother also counted on him for support. Dave's mother had provided for him throughout his upbringing, despite the challenges she faced as a single mother in a foreign country. Dave felt that it was his responsibility to repay her for all that she had done for him, and so it was imperative for us design his plan with this in mind.
We educated him on the process of retiring and customizing a program that would support his entire family and put him at ease. Finally, the day of his retirement came. Soon after, Dave told me he had finally realized there was more to life than the confines of his office. When he was working, he was in "providing mode." The love he showed his family was monetary. After retiring he was able to show his love through spending time with his family. He was able to share his life and his experiences with them, and that's what has made his retirement meaningful.
When we start working with a client, we want to know their fears, their hopes, their habits, and what they want out of retirement. In the process, we find that our clients learn a great deal about themselves, too. We usually don't choose to think about these crucial issues, about what matters to us and what doesn't, and in retirement that becomes everything. That's why it's just as important to offer support, in addition to advice. Our practical, personal approach enables our clients to educate us about what their most meaningful life looks like. After this, all they have to do is allow us to help them make it a reality.
The Right Choice
I hope this section helped you realize that the process of reviewing your finances with a professional is a personal and intimate one.
• What are some of the attributes you want your retirement planner to have?
• Go to miramontescapital.com and take a moment to look over the "Roadmap to Retirement" resource available on the website.
THE APARTMENT BUILDING YOU OWN IS ON FIRE
"Retirement isn't scary, the process is. Let us simplify it for you."
— Sid
Imagine that, after a life's worth of hard work, you've saved enough to make the huge investment of buying an apartment building. You sign the paperwork, you hand over ALL your retirement savings — your pension and your 401(k), and the building is yours. Now, your livelihood and life's work is tied up in this one venture. You decide to hire a property manager to take care of the establishment. With this person holding the reins of your life, how often are you going to want to check up on your investment? How often are you going to visit the building?
"We're going to be there every day!" most people say, "Every month at the least!" It's a natural response. Who among us could comfortably say, "Sure, I trust my manager — I'll just come once a year to check if everything's all right"? And yet, this is precisely what the vast majority of investment professionals ask you to do. After you meet initially to set up your portfolio, they'll schedule you for an annual checkup — just one meeting a year for one of the most important aspects of your life.
Let's go back to your apartment building. It's one year later and you're meeting with your manager. He's going to tell you, "OK, termites have eaten into the walls on the first floor. We need to take care of it. The tenants have painted the building purple for some reason. Let's take care of it. The west section of the building has burned down because of an electrical fire. Let's talk about our plan to rebuild it." Over a year, anything could happen to your investments, and these changes, good or bad, can potentially alter your needs and plans in substantial ways. We live in an ever-fluctuating world. The markets change, but the needs of the client and their lifestyle choices change too. That's why you need a proactive plan when you retire, not a reactive plan, which has become the industry standard. To achieve this, I developed the "Miramontes Method," outlined below, which includes constant and continuous communication.
Over the course of this book I'll outline what a good financial architect does, along with practical knowledge every retiree needs to know. At Miramontes Capital, we design our clients' portfolios by the same principal that governs an amazing work of art: perfect attentiveness to a clearly stated goal yields beautiful results. "Perfect attentiveness to a clearly stated goal yields beautiful results." Defining a goal is your first and most important step as the retiree. Then it's our job, as your financial architects, to design a retirement plan that helps you achieve that goal. Unlike paintings, though, which are painted once and are finished, a successful retirement demands continual vigilance to make sure that it still resembles the portfolio you set out to make.
Constant Communications and Analysis: The Miramontes Method
When it comes to your "apartment building," Miramontes Capital has a method in place.
Here's an overview:
1. We review your lifestyle. A lot goes into our introductory meetings with clients. Later, as you enter retirement, we'll be communicating with you every 30-45 days to ensure your lifestyle is represented in your plan.
2. We communicate. Your portfolio is at the center. Every 30-45 days, we analyze your needs and your expectations for retirement and actively communicate the best options available to you. It's this active and preemptive method that ensures your investment is taken care of.
3. We adjust. As your spending habits, market information, and other factors change, we make sure that your portfolio reflects these changes. Nothing is more important to ensure the stability of your "apartment building."
(Continues…)
Excerpted from "Retirement: Your New Beginning"
by .
Copyright © 2017 Sid Miramontes.
Excerpted by permission of Morgan James Publishing.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.
Table of Contents
Foreword ix
Note to Reader xiii
Part I Adjusting to Retirement 1
The Right Choice 3
Using The Right Choice Questions 5
Retirement is The New Beginning 7
The Apartment Building You Own is On Fire 13
Adjusting Your Mindset 16
Retirement Fears 21
Retirement with Your Partner 25
Retirement: It Will Happen to You (And It May Surprise You) 30
Part II Breaking It Down 35
Financial Advisor vs. Financial Architect 37
Fiduciary Responsibility Makes the Difference 39
Your Comfort Zone 42
Protecting Your Assets 45
Life Expenses 48
Pensions 53
IRAs and 401(k)s 58
Mutual Funds and Annuities: How They Work 63
Sectors-A Way to Diversify 71
Considering Taxes 74
Long-Term Care and Life Insurance 78
Real Estate Investment Trusts (REITs) 81
How Much Should I Be Putting Away? 84
Social Security 89
Inflation 96
About Your Principal 99
Designing Your Portfolio 102
Bonds 105
Stocks and Their Market 109
Rebalancing 113
Withdrawing Your Money: There's a System for That 116
Charitable Organizations 119
Part III Questions and Answers 123
Q & A 125
Conclusion 133
Appendix: Additional Resources 135
Right Choice Questions 138
Glossary 145
Index 157
Sid Miramontes 163
Notes on Sources 165